In Indian Sugar Mills Association v Indian Jute Mills Association, the CCI found that a decline in production and capacity utilization, even when demand has increased sharply, is an attempt at cartelization, and took this into account when imposing the penalty under section 27 of the Competition Act. Moreover, even practices such as excessive prices have not been explicitly covered by the abuse of dominant position provisions. The difficulty of finding the excessive price was highlighted by the ICC in Kapoor Glass India Private Limited v. Schott Glass India Private Limited. However, cci, which disagreed with R Prasad, found that excessive prices contravened subsection 4(1) in conjunction with section (2)(a)(ii) of section 4 of the Competition Act. Therefore, CCI`s decision-making practice suggests that, in unprecedented situations, CCI has broadened the scope of existing provisions and is prepared to cover any anti-competitive practices that it believes may have a CEAA in the marketplace. Given this power of CCIs, it is essential that parties operating in India are aware of agreements that may fall within the scope of the term ”anti-competitive”. In this bulletin, we will discuss the situations and conditions under which an agreement can become anti-competitive. Recently, the ICC imposed a nominal fine of Rs 100,000 on Airtel (Bharti Airtel Limited, one of the largest telecommunications operators in India) under Section 43A of the Competition Act for breaching the standstill obligation under Section 6(2)(A) of the Act, which requires the merged companies to put the transaction on hold before the ICC gives its consent. In another recent case, the ICC concluded that the payment of Rs 1.2 billion as an advance for a proposed transaction amounts to the completion of part of the merger in violation of Article 6(2) in conjunction with Article 6(2)(A) of the Competition Act, and therefore imposed a nominal penalty of Rs 1 million on the purchasers. How does a company demonstrate its commitment to competitive compliance? Is there an obligation to inform the regulator of competition infringements? The General Regulations also contain a number of factors that CCI and DG may consider when deciding on a request for confidentiality, namely: (1) the extent to which the information is known to the public; (2) the extent to which the information is known to employees, suppliers, distributors and other persons involved in the activities of the Party; (3) the measures taken by the party to maintain the confidentiality of the information; and (4) the ease or difficulty with which the information can be acquired or duplicated by others.
CCI may be invoked in violation of the confidentiality granted by the DG; However, CCI`s confidentiality order is not subject to appeal. The first step in demonstrating your commitment to complying with competition law is to have a competition law guide available to you, which can take the form of a manual or guide. Second, depending on the nature of the company and the industry, it is important to ensure that all employees are informed about competition law and related developments, which can be done through training programs with visible management commitment. Training programs and manuals can also be made available online via the company`s intranet. Staff should conduct these training and consultation sessions on a regular basis and keep a record of participants. Each newly hired employee should be required to provide the necessary training as early as possible, perhaps as part of their onboarding program. It is important to note that the Corporation has made serious efforts to adopt and implement policies and practices (in letter and spirit) that are consistent with the Competition Act. The commission consists of a chairman and a minimum of 2 members of the board of directors and a maximum of 6 members of the board. These members must have at least 15 years of experience in their respective fields. Its objectives, duties and powers are set out in the Competition Act, 2002. Its main task and objective is to ensure that Indian markets maintain a healthy and fair competitive environment, and it is given the power to ensure such an environment and to punish any action that affects its tariffs. Under Article 3(3) of the Law on competition, there is a rebuttable presumption of appreciable interference with competition (AAEC).
If a party can prove that the conduct did not cause an CEA, no violation of Article 3(3) (for cartels) can be established. The Competition Act provides explicit exemptions for certain types of horizontal agreements, as follows. CCI considered that these agreements allow oems to become monopolistic players in the market for their vehicle model, create barriers to entry, exclude competition with independent service providers and demand operating prices from consumers, in addition to the potential long-term structural anti-competitive effects on the automotive market in India. These agreements had the nature of vertical agreements, including exclusive supply agreements, exclusive distribution agreements and the refusal to conduct transactions under Article 3(4), and considered them to be AAEC in India. Once risks have been identified through regular internal audits or other means, companies should assess those risks and carry out a cost-benefit analysis, taking into account criminal provisions and effects (e.g. B, damage to reputation) non-compliance with the provisions of competition law. The risks to which the undertaking is exposed in relation to the market, competitors and related stakeholders should be analysed on the basis of the severity (if possible, quantified) and the impact on the overall activities of the undertaking. It may even be useful to organize a risk matrix or scale (using a matrix to evaluate employee performance is common in the HR functions of most companies). Responsibility will likely rest with senior management as well as the Corporation`s legal team, as appropriate, to ensure that the identified risks have been properly assessed and resolved. In this context, the company can count on the legal advice of external and internal legal teams.
The risk assessment should take into account, inter alia, the legal and regulatory implications (in the form of investigations, dawn searches leading to search and seizure orders, sanctions, measures taken against employees and management, amendments to agreements, division of the dominant undertaking, etc.); financial impact (in the form of share prices, loss of investor confidence, etc.); the operational impact on the implementation of the status quo; and reputational damage. A credible risk assessment requires the interdepartmental involvement of consultants (internal and external), the assessment of conformity and operational aspects of the company; and the identification of those responsible for implementing the compliance program. Doing business in India requires knowledge of different laws and regulations and their implementation. Competition in the market is a major challenge that must be managed carefully. It is important for businesses to realize that while competition brings prosperity, thriving and striving will be an ongoing process. In addition, the Competition Commission of India (Consolidation Business Transaction Procedure) Amendment Regulations, 2019, 2019, which came into force on August 15, 2019, added a new Regulation 5(A) to the existing Consolidation Regulations. Rule 5(A) introduces, among other things, a ”greenway” that allows combinations of certain types to cross a road with less stringent procedural requirements and restrictions. Concentration – in which the parties to the proposed concentration (including their respective group companies or a company in which they directly or indirectly own or control shares) do not operate at the same or different levels of the production chain and do not carry out any complementary activities – may benefit from the `green channel` route. In other words, parties to the concentration who, after examining all plausible alternative definitions of the relevant market, do not have horizontal, vertical or complementary overlaps, can benefit from the `green channel` route. If, as a result of an investigation, CC concludes that the agreement is anti-competitive and that it is accompanied by AAEC, it may issue some or all of the following orders: Significant changes have been proposed to the merger control regime, which include, but are not limited to: In addition, it is important to note that paragraph 2(b) of the Act provides that the term ”agreement” includes any agreement, agreement or concerted act – (i) independently of this, if such agreement, understanding or action is made formally or in writing; or (ii) whether any such agreement, arrangement or act will be enforceable by judicial process. Thus, even an oral agreement can be anti-competitive.
Agreements between parties that have not been formalized or written, but have not been signed or registered, can also be considered anti-competitive if they are found to have AAEC in India. The Competition Act 2002 also does not recognize agreements that impose appropriate restrictions that limit or protect the violation of rights guaranteed by intellectual property laws. In Shri Ashok Kumar Sharma v. Agni Devices Pvt. Ltd, it was decided that a mere restriction on the use of the mark would not be considered anti-competitive within the meaning of section 3 or 4 of the Act. The Competition Act does not provide for an objective defence of justification; However, the ICC took into account valid commercial justifications when analysing cases of abuse of a dominant position […].